Nonferrous

Throughout the ferrous scrap pricing downturn, veterans remained certain that the price would eventually rebound, and many certainly changed their buying and selling patterns predicated upon that idea.

Certainly, many of those same people—and many others—are doing the same with red metals.

It has been a long time since scrap copper dealers saw pricing from buyers that consistently stayed above 75 or even cents per pound. It is unclear whether this type of pricing is the kind of trigger that would bring cloistered copper out into the open, but buyers and sellers won’t know for certain until a rebound happens.

Some dealers are claiming to see signs that the long awaited price rebound could be around the corner. "Right now, with the scarcity of nonferrous scrap, I could take phone calls 24 hours a day for guys trying to cover orders," says one East Coast dealer.

Unfortunately in the scrap markets, scarcity has not always triggered instant price increases, but it could be starting a modest trend upwards.

Both industry analysts and dealers who trade every day see a resolution to overhanging foreign policy crises as the trigger that met set a manufacturing resurgence back in motion.

The East Coast dealer says of the activity of both generators and consuming facilities, "I think right now, a lot of them have held back, waiting to see what happens in the Middle East. If that has a positive resolution soon, I think a lot of people who have business expansion plans on hold will start being active again."

Such a bump in demand might well help supply and demand factors collide and turn into higher prices. "My play is there is a shortage of material: It’s a tough winter and there is not much production scrap being produced," notes the dealer. "There should be a window of opportunity before the production scrap starts being generated when there will be demand but no scrap—thus, a price spike," he predicts.

Metal Management Inc., Chicago, has announced plans to more than double the number of its company locations that buy, process and sell stainless steel scrap.

Albert Cozzi, the company’s chairman and CEO says, "The company has historically concentrated stainless steel scrap processing operations in five facilities: Chicago, Pittsburgh, Newark, Hartford and North Haven, Conn. Beginning this month, we will commence handling stainless steel scrap at our Birmingham, Cleveland and Memphis locations. Over the next two months, we will add our Denver, Phoenix and Toledo facilities to that list."

The market definitely exists for stainless, as evidenced by a Reuters report that indicates China may import twice as much nickel in 2003 as last year, in part because of a scarcity of stainless steel scrap. The nickel will feed the country’s growing stainless steel industry.

The Reuters report quotes one international nickel trader as saying, "Nickel imports will more than double, [because now] there’s hardly any stainless steel scrap available."

Reflecting strong demand from China, LME warehouse stocks in Singapore had shrunk to less than 1,600 metric tons in early March, down from more than 6,000 metric tons at the start of the year, according to Reuters.

Traders contacted by Reuters said China’s production of hot-rolled stainless steel should reach one million metric tons this year, up as much as 300,000 metric tons over last year.

The scarcity may be caused in part by the unwillingness of Chinese mills to buy over a given price point. A scrap trader based in Shanghai told Reuters that while international suppliers were asking for $850 to $900 per metric ton, for the "sabot" grade, Chinese importers were not willing to pay more than $780 to $800 at present.

A spokesperson for Noranda Inc., Toronto, says the company is planning to invest in a new recycling facility in Canada that will be dedicated to providing its Horne, Quebec, smelter with a new source of recycling-derived material.

The proposed recycling facility will apparently be geared toward handling used electronics. The site, not yet announced, will be similar to the Micro Metallics facilities the company presently operates in the U.S, in Canada and Tennessee.

The company is examining ways to make its Horne smelter more cost effective, having recently met with Le Syndicat des Travailleurs de la Mine Noranda, the union representing employees at its Horne smelter, who have been on strike since June of 2002. Noranda says some 125 jobs will need to be eliminated.

The smelter’s profitability has been affected in 2003 by low treatment charges for copper, the Horne’s main source of revenue. Since the beginning of the strike, treatment charges for copper concentrate have fallen by 15 percent and treatment charges are 20 percent lower in 2003 than what was received in 2001. Noranda is also committed to improving revenues at the Horne smelter.

In addition to studying electronics recycling as a source of material, the company is also planning to invest $10.3 million in exploration activities aimed at finding new copper-zinc deposits in Quebec.

In 2002, the Horne smelter treated 689,000 metric tons of material containing copper, 44,700 metric tons of recycled precious metals and produced 147,020 metric tons of copper anodes and 510,175 metric tons of sulphuric acid.

Workers at the Friendly, W.Va., Ormet Aluminum Corp. scrap aluminum melting plant have ended a strike that temporarily disrupted production.

The three-week strike ended after a new labor agreement was reached between managers and union workers represented by United Steelworkers of America Local 576-01.

According to an Ormet spokesperson quoted in a Reuters report, the deal is a three-year contract running through mid-2006 that allows for some wage increases and some concessions by workers to pick up certain health care costs.

The plant, which has an annual capacity of 175 million pounds, melts used beverage containers (UBCs) and other forms of aluminum scrap. It accepts baled, densified and shredded aluminum can scrap.

The plant consists of two 142,000-pound capacity gas-fired furnaces. It supplies aluminum sow and molten aluminum to other Ormet plants, including a rolling mill that makes cansheet.

Wheeling, W, Va.-based Ormet Aluminum operates nine aluminum production facilities in seven states.

The large-screen flat panel displays featured in many newer television sets compete with traditional televisions that use cathode ray tubes (CRTs), objects that make up an important end market for lead.

If the screens gain in popularity at the expense of lead, they will in turn provide a considerable market for silver, according to the Silver Institute, New York.

Sales of flat panel screens have been growing at a rate of more than 20 percent annually, the Institute says. The screens consist of two flat sheets of glass, with a grid of thousands of thin strands of silver placed on the back of the sheet facing the viewer.

Manufacturers have not divulged how much silver is used in each screen, but one estimate calculates an average weight of about one gram per flat panel unit.

If worldwide sales of flat panel televisions reach 1.8 million units in 2003, that could mean a total consumption of more than 110,000 ounces of silver in the application this year.

Although this is a growing market, it will represent just a fraction of the total 130 million or more ounces of silver expected to be consumed in overall global electrical and electronics applications.